What McIntosh says about JIT is kind of correct as far as at goes.
Like what is said by a lawyer representing one party in a trial is
correct as far as it goes. If you're interested only in collecting
anti-JIT propaganda, he's told you all you need to know. Otherwise, a
bit more research will pay off.

By removing excess inventory from the entire system, JIT is a
technique for speeding up the ol' reflexes throughout the economy.
There are many advantages of JIT:

1) As McIntosh says, it reduces costs. Warehouses are expensive, and
excess inventory ties up a lot of money.

2) JIT increases production (read:jobs). Demand tends to be fickle.
The faster we can respond to changes in demand (not just increases or
decreases in demand, but demand for other products), the more
efficiently we can meet demand. Just-in-case inventory means we wait
for excesses to be sold before replenishing them (perhaps with
something else).

3) JIT increases product quality. If a product fails to meet spec or
doesn't sell well, we aren't stuck with a whole lot of it. We can
implement quick changes (weeks rather than months) to fix problems or
meet buying patterns. As companies moved from just-in-case to JIT,
they began to use up existing inventory. What they found was that a
dismayingly large percentage of that inventory was basically junk -
obsolete parts, broken parts, parts that those on the assembly line
had been 'tossing back' into the warehouse sometimes over and over
for years!

4) JIT permits a greater variety of products and more experimentation.
If the cost of trying something new is minimal (no big expensive
production runs, no danger of unwanted products gathering dust
somewhere), there is much greater incentive to try new and different
products. The benefits of hitting a winner are not diminished, while
the risk (cost) of a loser is much smaller.

There have been numerous posts on this forum pointing out local
retailers who have noticeably increased their supplies of products
commonly purchased for y2k preparation -- more shelf space devoted to
drinking water, oil and oil lamps, generators, certain foods, etc.
Without JIT, this would not have been possible. The producers of
these products feel the changes in purchasing patterns within days,
and respond accordingly. Again, with just-in-case inventory, the
producers wouldn't have noticed for months.

However, the many and varied advantages of JIT cannot be achieved
without a high degree of computerization. Serious problems throughout
the inventory control, distribution, and ordering systems indeed
present more of an immediate hazard with JIT. I think JIT is more
robust than McIntosh imples -- that is, the system will fail
'gracefully' rather than instantly. Like a balloon with a slow leak,
rather than a sudden burst.

It should also be noted that corporate stockpiling doesn't change the
nature of JIT -- these stockpiles represent a change in demand,
exactly as though sales were increasing. As stockpiles are consumed
later, JIT systems can switch quickly to wherever the demand moves to.

McIntosh is fundamentally incorrect in saying that JIT systems only
work well if the demand for a specific product remains relatively
constant and predictable. Exactly the opposite is true! The ability
to respond quickly and appropriately to changes in demand is the main
strength of JIT. If a retailer runs out of something because of
sudden demand, JIT allows the system to respond and fill that demand
fast.

McIntosh makes this error because he assumes that the warehouses were
always full before JIT eliminated them. This is very wrong. When
something is backordered today, we wait at most a week or two.
McIntosh seems to have forgotton that when backorders happened in the
pre-JIT days (and they certainly did), the wait was often many months.

In y2k circumstances, the old just-in-case inventory system had one
single advantage: in case of panic buying, the system would require
up to week to exhaust supply (if that supply were fully stocked, of
course) rather than a few hours. After that, systemic computer
failures would allow neither system to replenish any time soon.

Summary: If the means of production and/or distribution break down,
an inefficient system is no better than an efficient system. Either
is broken. So long as the computers are at least limping, JIT remains
superior.

er, Flint, I may be wrong on this but I think you've mistated the
issue to the extent that if the computers are even limping along JIT
is more efficient IF AND ONLY IF ALL OTHER FACTORS (supply,
transportation, availability of personnel, etc) REMAIN FUNDAMENTALLY
UNCHANGED.

The error in your logic is in assuming all other factors will in fact
remain unchanged. Unless all other factors are repaired or replaced
immediately upon failure (impossible with degraded JIT) degradation
of computer systems, which will degrade JIT response, will also have
ripple effects through out all of the other contributing factors.

You are essentially correct and raise a good point. JIT and JIC are
roughly analogous to the size of the memory cache or disc buffer you
have on your computer. A bigger cache just means fewer trips to main
memory but increases the probability that lots of stuff in the cash
isn't what's really needed. Likewise, if the computer's mother
board is faulty or there is a problem with main memory or the disc
drive, it won't matter how big or small the buffer is.

When the Soviet Union collapsed at the beginning of this decade, I
remember hearing an expert say that one of the principal causes was
that their economy had broken down because it had grown too complex
to be managed by a centralized planning organization. It had
operated OK in the 1930s through 1960s because the Soviets had
produced a relatively few items and they were ruthlessly
standardized. By the 1980s the Soviets were producing about
10,000,000 individual items. This overwhelmed the planners.

We may be finding ourselves in an analogous situation with JIT and
Y2K. We depend on our computers to manage everything today. The
invisible hand of the market is still present, but we could not enjoy
our wide variety of goods and reasonable prices without JIT and
computers. I believe that if the computers fail, we will suffer at
least as great a collapse as happened to Russia.

Flint, I did a paper on JIT a few years ago, did research, obviously.
I've also posted a couple of things about JIT on this forum,
including the thread "Wal-Mart knows what you bought last Christmas."
I know that JIT is so effective that Toyota-Japan copied it, for
instance--that's high praise. JIT is a superb system.

But I say again--all it takes is a wildcat truckers' strike and within
three days (probably much less) supermarket shelves will be cleaned
out. Anyone who's seen a supermarket within 12 hours of a hurricane's
arrival in the vicinity knows what I mean.

I'm one of those who thinks Y2K is not the only disruption we have to
bear in mind; that storing some food and supplies is prudent in any
case.

I run a hospital lab here in the midwest. We rely on JIT to stock
our reagants for our machines. Refer' storage is expensive and
hazardous to your budget if the refer' fails, thus JIT.

The UPS strike almost did us in. If it wasn't for our priority in
line at FEDX we would have been dead.

Point made I hope.

Flint, good post, we tend to forget all the plusses. I however
remain skeptical as to how fault tolerant the system is under certain
production line kind of industries rather than grocery and discount
store examples

I believe I answered your concern at least 3 times in my previous
post, and Nathan clarified it a bit as well. JIT needs a little more
explanation, I see.

The essence of JIT is *not* the thin pipe. Yes, this was the initial
goal, to save on warehousing costs and free up money tied up in
inventory. But in practice, the essence of JIT is *short production
runs*. Instead of producing a whole lot of identical things all at
once, we produce a little bit each of a lot of different things, and
do it very often.

As a result, we needed to vastly reduce setup and turnaround times.
Production has become far more flexible and adaptable, and JIT caused
this. In addition, of course bottlenecks happen pretty often in any
system, no matter how computerized. There are still mistakes,
accidents, people change their minds. On the manufacturing line, this
means that parts often enough aren't *quite* just in time, they're
late. Because of our new flexibility, this isn't a problem. We just
do short runs of other things while we wait.

This is what I was referring to when I wrote that JIT breaks down
gracefully, whereas JIC broke down completely. If computer glitches
cause shortages, JIT is better able to adapt to producing what *can*
be produced. So JIT really is to our advantage in a degraded
production or distribution environment. It is designed to adapt
quickly to changing conditions. JIC had much less flexibility, and
tended to freeze up in the face of problems.

Yes, a fat pipe will last a bit longer in the case of a complete
breakdown. Perhaps you could argue that we could live off what
happens to be in warehouses while we fixed on failure. But this seems
unlikely. If problems are so severe that production is impossible, it
really doesn't matter how big a production run you can't even start.
But short of a complete breakdown, JIT is superior.

If you've researched this, you know what I'm talking about (I work in
a manufacturing environment). A lot depends on the time frame you're
talking about.

In good times, little things can cause larger delays in a JIT system,
this is true. But not much larger. In bad times, when you're looking
at getting the goods in two weeks (as opposed to overnight in good
times) rather than two months, JIT starts to look much better. Yes,
in a hospital people will die if some supplies are two weeks late.
But with JIC, you might get your supplies quickly for a few more
weeks, then wait months for the next delivery. Which is worse?

The grocery store example has some problems as well. Highly
perishable items have always been JIT - you can't warehouse bread and
milk.

Flint, I'm curious, where do you live? I ask because I'd like you to
give me some insight into how a metropolitan area such as Los Angeles
and Southern California in general might fair if there are significant
breakdowns. If you aren't familiar with Los Angeles and Southern
California then perhaps you can share some insight into how the
Hawaiian Islands will do if there are significant breakdowns in
shipping, etc?